Retirement is coming up a lot faster than you expected. At one time, the plan was to sit back and enjoy those years from the comfort of the home that you own now. Events over the last decade or so have caused you to wonder if that’s the best choice. In fact, you may be thinking about retiring in a different country.
If this is how you feel, don’t think you’re alone. Many people are making that choice. Here are seven reasons why people choose to spend their retirement years in another country.
Climate can be a strong motivator to settle in a different nation. Perhaps you always dreamed of being able to enjoy warm days paired with evenings that usually required nothing more than a sweater. Maybe the idea of living near a beach or close to a forest is your idea of heaven.
Whatever the case, some countries offer the climate you desire along with other benefits. Rather than continuing to deal with the type of weather you’ve known for years, it would be nice to make the change.
2. Favorite Location
It’s not unusual for those about to retire to consider living in an area they once visited while on vacation. The experience was so positive that they made it an annual ritual to visit. Their love for the locations led them to consider making it their home once retirement arrives.
There’s a lot to be said for this reason of relocating in retirement. The area is already somewhat familiar, owing to the previous visits. You already know that there’s no language barrier to face, and the pace of life in that nation is more to your liking.
3. Affordable Housing
The ability to enjoy a life that’s relatively free of financial worry is the dream of just about every retiree. Unfortunately, the last recession did a number on the retirement plans. Work pensions lost a lot of value at that time, causing many people only to draw a fraction of what they originally planned.
Finding somewhere affordable to live may be easier in another country. There are expats from the United States and Canada who do quite well in several nations found in Central and South America.
There are even some countries where it would be possible to find a comfortable place to live and still manage well on the current average Social Security income while having all or most of the amenities you’ve long enjoyed.
4. Lower Recurring Expenses
As the U.S. BLS confirms: statistics show that Americans are poorly prepared financially and struggle to face the cost of retirement.
Housing is not the only factor to consider as you think about moving abroad for your retirement. The recurring costs each month are also often much easier to afford. From essential utilities to enjoying meals out, you may be surprised at how affordable things are in some parts of the world.
Keep in mind there may be some imported goods that are more costly. If those happen to be things you don’t need in your new retirement location, there’s not likely to be much of a problem. Compare the average cost for power, phone, water, and internet with what you pay now. There’s a good chance the difference will be in your favor.
5. Accessible and Economical Healthcare
Many nations have healthcare systems that provide affordable services to expats. Depending on where you settle, the benefits you receive may be similar to those enjoyed by citizens.
In other instances, the medical services extended to expats may cost a little more while remaining much lower than what you’ve come to consider the norm in your home country. From routine doctor visits to dental services to medications and hospital stays, the odds of needing to choose between buying food and healthcare costs are extremely low.
6. Lower Tax Obligation
One of the concerns that some people raise about living offshore for retirement is paying taxes in two different countries. In some cases, that’s a valid concern. For this reason, it pays to investigate what sort of taxation applies at home for an expat and what must be paid in the country where you retire.
You may find your domestic tax agency offers deductions and exemptions that offset much of the taxes you usually pay on any funds withdrawn from a retirement account. Pair this with the fact that many countries will not tax all or at least most of the money you’re living on, and it’s easy to see how your tax obligation will be easier to manage.
7. Added Incentives in Offshore Locations
There are many countries where expats are provided with additional incentives to make their homes there. The reasoning behind those incentives is that expats choose to live in the country and spend their money locally. Seen in this light, the expense of providing those incentives is easily offset while also promoting a stronger local economy.
Incentives offered vary from country to country. You might be eligible for discounted movie tickets or discounts on other forms of entertainment. Perhaps you get to enjoy price breaks on restaurant meals.
There may be special offers to open bank accounts or use your existing offshore account for purchases. If you meet the income levels, put in place for eligibility, these incentives make it all the easier to live well on less money.
Is Retiring in a Foreign Country Right for You?
To find out if retiring abroad makes sense for you, take a good look at the income you’ll have once leaving the workforce, the overall cost of living in an offshore location, and what sort of setting you want for this new phase of your life.
By weighing your options carefully, it will be easier to know where to live once the retirement party is over.